shopkick has announced that Citi will sponsor the placement of free signal boxes in the first thousand small to medium sized businesses selected that enable the location-based loyalty program. shopkick’s statement identifies local “retail stores, coffee shops, bakeries, and yogurt shops” among its target segments. The move down-market comes after shopkick has already integrated with a number of large national retailers including Target, Best Buy, and Macy’s.

“We will do for small and medium-sized local stores what we have done for large, national chains: drive foot traffic. It’s the single, hardest problem to solve – and the most valuable driver of success – for both retail and service businesses,” said Cyriac Roeding, co-founder and CEO of shopkick. “With shopkick, stores also have the potential to increase basket size and margins, improve shopper engagement, and build customer frequency. shopkick’s new program will help small and medium businesses in a big way.”

Citi, through its Citi Ventures unit, was an early investor in shopkick.

“Our work with shopkick demonstrates one of the ways we are working to drive growth for our clients and for our company,” said Christopher Kay, Head of Ventures, Citi Ventures. “We invest in cutting-edge companies and work with them to deliver new experiences for clients designed around their increasingly digital and mobile lives. shopkick is the leading mobile shopping app and drives measurable foot traffic to its retail partners. We’re happy to help make that shopper engagement and customer retention available to smaller businesses.”

A hundred small and medium-sized businesses in three cities have already been involved in a pilot program for the past couple of months. “For years, we’ve relied on expensive, untargeted ads to try to attract new customers, and paper punch cards to reward our loyal buyers,” said Chris Whirlow, owner and proprietor of Yogurt My Way. “Now, we not only have a great way to let new customers know about us, but we can thank them for visiting — and tie our loyalty and rewards points to loyalty programs like Best Buy, Target, Macy’s and Facebook Credits! It’s great!”

In order to provide high-value rewards to consumers for actual walk-ins, the shopkick app, combined with the shopkick Signal – an inaudible sound emitted from a patent-pending device located in each participating retailer – verifies a user is in-store, and then awards shopkick’s rewards currency “kicks”. This ensures that marketing dollars put into the shopkick program are being spent to reward customers who are actually present in the store, something not possible with traditional location-based applications which rely on GPS technology that has an error radius of 50-1,000 yards on mobile phones.

Kicks are awarded for checking in to more than 3 million businesses nationwide, with highest-value walk-in rewards available at the more than 2,500 retail and 160 mall locations that makeup shopkick’s Retail Partner Network. Walk-in rewards are currently available in all 50 states at select Target, Best Buy, Macy’s, American Eagle Outfitters, Sports Authority, Crate and Barrel, Wet Seal, west elm and Simon Property Group mall locations.Kicks earned can be redeemed for in-store gift cards, song downloads, movie tickets, hotel vouchers, Facebook Credits to play games online, donations to 30 different causes and charities and more.

Launched in August 2010, shopkick quickly became the largest location-based shopping app in America and reached 1.8 million users within a record 10 months since its launch.